The recent two-week ceasefire between the US and Iran has offered temporary relief to the global economy, particularly in energy markets. However, the Reserve Bank of India (RBI) has highlighted significant risks to the Indian economy stemming from this geopolitical situation. RBI Governor Sanjay Malhotra outlined five channels through which the West Asia crisis could impact India: rising energy prices, supply-side disruptions, potential capital outflows, weak global growth affecting exports and remittances, and tighter global financial conditions. As a result, the RBI revised its FY27 GDP growth forecast down to 6.9%, reflecting a 0.2 percentage point decrease in H1 growth estimates. Additionally, the inflation forecast was raised to 4.6%, with the Consumer Price Index (CPI) expected to peak at 5.2% in Q3FY27. Despite these challenges, the RBI believes that fiscal measures taken by the government will help mitigate adverse impacts, including targeted support for exporters and maintaining adequate fuel supplies. The RBI's current stance suggests a cautious approach, with a focus on ensuring ample domestic liquidity and credit flow to vulnerable sectors such as exporters and micro, small, and medium enterprises (MSMEs).